Lowe’s said to seek acquisitions in Brazil

Lowe’s is seeking acquisitions in Brazil, two people with knowledge of the matter said, in a move that would help it penetrate a fragmented industry to take advantage of a growing pool of homeowners.

Lowe’s is working with Goldman Sachs as it searches for targets, said the people, who asked not to be identified discussing private information.

Options for the Mooresville-based company include buying part of BR Home Centers, the home-improvement holding company valued at about $220.1 million that is working with Rothschild to study strategic options, one of the people said. Also exploring a sale is Curitiba-based Balaroti Materiais de Construcao, which is working with Morgan Stanley, the person said.

While Lowe’s and rival Home Depot have built a presence in Mexico, the U.S. construction-materials superstores have yet to expand into most of Latin America. An acquisition in Brazil would have Lowe’s entering a market where the formal home-improvement industry still competes with corner hardware stores, even as rising incomes present compelling prospects for sales.

Although economic growth is slowing this year, retailers still see a market in which tens of millions of Brazilians entered the middle class in the past decade. The government has also encouraged homeownership with its low-income housing initiative dubbed Minha Casa, Minha Vida – or My Home, My Life – which has delivered more than a million homes, with more on the way.